The World Bank Report No: ISR12824 Implementation Status & Results Ukraine Public Finance Modernization Project (P090389) Public Disclosure Copy Operation Name: Public Finance Modernization Project (P090389) Project Stage: Implementation Seq.No: 12 Status: ARCHIVED Archive Date: 18-Dec-2013 Country: Ukraine Approval FY: 2008 Product Line: IBRD/IDA Region: EUROPE AND CENTRAL ASIA Lending Instrument: Specific Investment Loan Implementing Agency(ies): Key Dates Board Approval Date 08-Jan-2008 Original Closing Date 30-Jun-2013 Planned Mid Term Review Date 19-Mar-2012 Last Archived ISR Date 17-May-2013 Effectiveness Date 23-Oct-2008 Revised Closing Date 30-Jun-2015 Actual Mid Term Review Date 19-Mar-2012 Project Development Objectives Project Development Objective (from Project Appraisal Document) The objective of the Project is to strengthen public financial management by improving operational efficiency and transparency. Has the Project Development Objective been changed since Board Approval of the Project? Yes No Component(s) Component Name Component Cost Strengthening Institutional Capacity and Operational Effectiveness 2.58 Development of an Integrated Public Financial Management System 61.20 Project Management 1.22 Overall Ratings Previous Rating Current Rating Moderately Unsatisfactory Moderately Unsatisfactory Public Disclosure Copy Progress towards achievement of PDO Overall Implementation Progress (IP) Moderately Unsatisfactory Moderately Unsatisfactory Overall Risk Rating Substantial Substantial Implementation Status Overview The World Bank team visited Kiev during the week of October 21 to 25th, 2013, to monitor the developments, review results indicators, and clarify the next steps on project implementation. This followed an amendment to the Loan Agreement (LA), to include new covenants linked to progress in implementing the Public Financial Management System (PFMS) implementation (Part 2.c in Schedule 1 of the LA) (April 5, 2013). Between April and October the Government satisfied the first of the three covenants in the Loan Agreement, by initiating the bidding process (ICB-4) for the development of the PFMS solution. Despite the recent progress made in implementing agreed actions the overall project performance was maintained as marginally unsatisfactory, taking account of the high level of risks and the many further actions that need to be taken to ensure a successful outcome. Page 1 of 6 The World Bank Report No: ISR12824 Locations Country First Administrative Division Location Planned Actual Ukraine Not Entered Ukraine Public Disclosure Copy Ukraine Kiev Oblast Kyyivs'ka Oblast' ✔ Results Project Development Objective Indicators Indicator Name Core Unit of Measure Baseline Current End Target Increased strategic alignment of the budget Text Value Existing budget formulation The Draft 2014 State Budget Fully functional PFMS in use with the public policy priorities . methodologies are not was developed and based on during the planning execution conducive for the use of forecasting and program of 2016 budget. budgets as a policy documents, national target instrument. programs Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Comments Reduction of 20% in time required to get Text Value Decision-making processes The determination the Minimum of 20% reduction in necessary information for managerial decisions are delayed because baseline time for such average time for accessing through the use of an integrated information is fragmented business processes was information by key decision- managementand information platform. among several systems and completed. makers as measured by cannot be accessed 1. settlement services/ follow-up survey. efficiently. making payments of spending units by entities; 2. preparation of reports (consolidated reports) on execution of the state budget, consolidated budget and consolidated reports of key spending units by the bodies of STSU; Public Disclosure Copy 3. formulation of revenue forecasts in preparing the budget by the MoF; 4. planning of control and auditing measures by the State Financial Service of Ukraine. Annual measurement is in Page 2 of 6 The World Bank Report No: ISR12824 progress to determine improvements. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Public Disclosure Copy Comments Increased transparency and reliability of public Text Value Public Sector accounting is In progress. National accounting sector financial reporting through compliance not compliant with ISA or EU The Draft Chart of Accounts standards are in use (via new with international accounting standards and accession requirements. for Public Sector, submitted PFMS). alignment with EU accession requirements. by the STSU, was elaborated by the MoF, discussed in the course of working meetings and on the Accounting Methodology Board 19.09.2013 and 22.10.2013 Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Comments Intermediate Results Indicators Indicator Name Core Unit of Measure Baseline Current End Target The local budgets are based on program-target Text Value Program budgeting at local Completed. Budget preparation for all 692 method (PTM) and all relevant budgetary budget level is optional (pilot 692 local budgets were local budgets is based on program passports are managed with the new impl). involved in the experiment PTM, supported by PFMS PFMS. related to the implementation (about 20,000 prog). of PBB at the local level and nearly 42,500 budget programs were approved. Date 23-Mar-2012 25-Oct-2013 30-Jun-2015 Comments Budget data and policy assumptions published Text Value Summary proposed budget In progress. State budget execution in greater detail. and budget execution State Budget execution performance is published in published on the Internet. performance is published on detail from PFMS database the MoF web site (monthly). (monthly). Public Disclosure Copy In accordance with the Article 28 of the Budget, information on execution of the State Budget of Ukraine (local budget) containing indicators under the general and special funds regarding revenues and regarding expenditures and lending shall be published on the official Page 3 of 6 The World Bank Report No: ISR12824 website of the Ministry of Finance of Ukraine on a monthly. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Public Disclosure Copy Comments Budget execution: Improving the system of Text Value Accounting and financial Changes to legislation to PFMS is operational based on PFM by means of modernizing accounting reports not unified in public implement PFMS for new national accounting and system in public administration sector. administration sector, not accounting and reporting in reporting standards. aligned with the IAS. line with nat’l standards are in progress. 19 NAS nationalaccounting standards for public sector were developed and approved. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Comments MoF, STSU and SFIU staff, and spending units Text Value MoF staff are not familiar with Not carried out + 14 workshops for SUs (SUs) are trained on new legislation & process new PFM legislation. (1,700 participants) changes. + Training of 1,400 staff. Date 23-Mar-2012 25-Oct-2013 30-Jun-2015 Comments Public Financial Management System (PFMS) Text Value Current PFM information In process. PFMS system fully established and functioning. systems are fragmented. The ICB-4 presses were operational. New budget started 19.08.2013. The Date codes and unified chart of of submission of bids by the accounts are used in PFMS. Bidders - October 30, 2013. Staff and specialist training completed. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Comments MoF, STU and KRU staff trained in PFMS Text Value None currently trained. Not carried out All staff training completed. functionality and operations. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Public Disclosure Copy Comments Timely and comprehensive fiscal management Text Value Currently financial reports are In process. Based on the Data warehouse is fully reports produced. fragmented. suggestions and comments of operational as a part of representatives of functional integrated PFMS platform for and analytical units of MoF, online queries; and timely, STSU, and SFIU, the comprehensive reporting. reporting forms database was defined as part of the ICB-4. Date 25-Mar-2008 25-Oct-2013 30-Jun-2015 Comments Page 4 of 6 The World Bank Report No: ISR12824 Data on Financial Performance (as of 07-Oct-2013) Financial Agreement(s) Key Dates Project Ln/Cr/Tf Status Approval Date Signing Date Effectiveness Date Original Closing Date Revised Closing Date Public Disclosure Copy P090389 IBRD-48820 Effective 08-Jan-2008 25-Mar-2008 23-Oct-2008 30-Jun-2013 30-Jun-2015 P090389 TF-90722 Closed 21-Sep-2007 21-Sep-2007 21-Sep-2007 30-Jun-2008 31-Oct-2008 Disbursements (in Millions) Project Ln/Cr/Tf Status Currency Original Revised Cancelled Disbursed Undisbursed % Disbursed P090389 IBRD-48820 Effective USD 50.00 50.00 0.00 3.71 46.29 7.00 P090389 TF-90722 Closed USD 0.23 0.22 0.01 0.23 0.00 105.00 Disbursement Graph Public Disclosure Copy Key Decisions Regarding Implementation The ICB-4 process was initiated on August 19, 2013, after the Bank's review and clearances. The first stage bid submission date was extended from October 16 to October 30, 2013, in response to the requests from five bidders, after an extensive clarification process which resulted in three amendments. Restructuring History Level two Approved on 26-Apr-2012, Level two Approved on 04-Apr-2013 Related Projects Page 5 of 6 The World Bank Report No: ISR12824 There are no related projects. Public Disclosure Copy Public Disclosure Copy Page 6 of 6